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Trust repair is concerned with ways in which to dampen the negative outcomes associated with trust violations, with the aim of restoring positive

exchange (De Cremer, Van Dick & Murnighan, 2011). While it is generally accepted that trust is rarely repaired to its original level (Afifi, Falato & Weiner, 2001),

research suggests that it may be repaired to a level in which future cooperation is possible, and acts of revenge or retribution that may come from low levels of trust are avoided. Acts that help to repair trust are classified as either non-substantive or substantive responses. Non-substantive responses are verbal accounts that aim to repair trust through responses such as an apology, denial, excuse and justification

26 (Cody &McLaughlin, 1990; Kim et al., 2004; Tomlinson & Mayer, 2009).

Substantive responses are more behavioural in nature, and may include actions such as the introduction of rules, contracts, procedures and monitoring, which help constrain behaviour to prevent a trustee from acting untrustworthy (Sitkin &Bies, 1993).

2.4.1 Non-substantive response strategies

Non-substantive responses, such as an apology, justification and denial have dominated the trust repair literature. Studies have shown that a verbal response following a trust violation can be effective at dampening the resulting negative outcomes (e.g., Ohbuchi, Kameda & Agarie, 1989). Each response operates differently to impact the causal attributions a person (trustor) makes about the trustee’s actions, and in this way, have a differential impact on trust repair. An apology signals an acceptance of responsibility for a violation, and thus attributes the cause of the event internally. It involves communication of remorse and a promise to reform, which suggests that the trustee’s behaviour is unstable and therefore unlikely to happen again (Tedeschi & Norman, 1985). A denial rejects responsibility for the event, and provides a clear statement that the allegation is false (Cody &

McLaughlin, 1990; Tedeschi & Norman, 1985). It attributes the cause of a violation to external factors in an attempt to reduce personal accountability. Similarly, excuses and justifications point to external factors by reframing actions in a more positive manner, or in accordance to higher goals or values (Tedeschi & Norman, 1985; Tomlinson & Mayer, 2009). When a trustee attributes an event to be out of their control it reduces the assignment of personal blame (Walster, 1966) so that the trustee is perceived more favourably (Tomlinson & Mayer, 2009), which increases the chance of pardon (Sitkin & Bies, 1993).

27 The effectiveness of non-substantive responses in repairing trust depends, in part, on the degree of personal culpability for the event. Coombs and Holladay (2002) propose that a violation of trust should be followed by an evaluation of responsibility for the event, before deciding upon the non-substantive response to employ. When little or no attributions of responsibility can be directed towards the trustee (e.g., a competence-based violation), a denial is effective. For moderate attributions of responsibility, excuses or justifications are more likely to effectively manage the situation. However, when the attribution of responsibility lies strongly with the trustee (such as with an integrity-based violation), an apology offers the most promise in re-building trust. This is due to the fact that an apology accepts responsibility and exerts remorse, actively demonstrating a commitment to reform.

Support for the effectiveness of an apology in repairing trust has been shown in a number of studies (Gill, Thompson, Febbraro & Barnes, 2010; Kellerman, 2006; Tomlinson, Dineen & Lewicki, 2004). Kim and his colleagues (2004) looked at the effects of an apology and denial on trust repair following a competence-based and integrity-based violation. They found that an apology was most effective in repairing trust following a competence-based violation and a denial was most effective in repairing trust following an integrity-based violation. Kim et al. explained this finding using the belief formation perspective (Reeder & Brewer, 1979), suggesting that a denial is more effective in cases of integrity-based violations as the belief that one lacks integrity is difficult to disconfirm once established. However, others have shown that an apology may be more effective than a denial following integrity-based violations. For example, Maddux, Kim, Okumura and Brett (2011) found that an apology repaired integrity-based violations, as manifested in greater trusting beliefs and trusting intentions. This was partly attributed to the fact that less blame towards

28 the trustee was implicated following an apology which allowed trust repair attempts to ameliorate. Gill et al. (2010) also found an apology to be more effective than a denial in the repair of trust, regardless of violation type, with greater evidence of this in the ‘real world’ and outside of a research context.

Tomlinson and colleagues (2004) argue that an individual should always admit culpability and apologise following a violation. An effective apology can positively influence the interpretation of another’s intentions behind an act (Ferrin et al., 2007), reduce aggression (Ohbuchi et al., 1989) and promote reconciliation through more favourable attributions about another’s actions (Kellerman, 2006; Tucker, Turner, Barling, Reid & Elving, 2006). An apology can also increase identification between parties by repairing a trustor’s faith in shared common goals, with both factors known to increase trust (Lewicki, 2006).

Despite the benefits associated with apology, research suggests that these are not the most common response following a transgression within organizations, but that justifications take this role (Coombs, 1999). Justifications attribute responsibility for an event to external sources to weaken causal links to the person’s character or stable disposition. In this way, they are argued to help repair trust as they allow a person’s actions to be accounted for by events outside of their control (Kelley & Michela, 1980; Pettersen, 1987). There is some evidence to support the positive effects of justification following an act of betrayal. Keltikangas-Jarvinen and

Lindeman (1997) found that violations such as dishonesty and theft are more readily perceived to be acceptable when an individual justifies their actions as being

performed under duress or when provoked. Similarly, Cauffman, Feldman, Jensen and Arnett (2004) found that acts of violence are accepted when they were justified as self-defence. A justification following an act of betrayal is considered acceptable

29 when there is evidence of a bad relationship between the trustor and the trustee, but least acceptable when an individual is thought of as being vindictive (Feldman & Cauffman, 1999), or acting in a way for self-protective reasons (Petersen, Petersen, & Seeto, 1983).

While some evidence supports the role of justifications in repairing relationships following a transgression, it is generally regarded as a less effective response following an act that signals a trust violation. Schlenker, Pontari and Christopher (2001) suggested that those who make justifications, and point to external causes following a violation, are generally perceived as deceptive, self absorbed, unreliable and having a flawed character. Furthermore, evolutionary psychologists have proposed that individuals are more likely to hold a person (e.g., a manager) accountable for an event, consequently attempts that attribute the cause to be external are likely to be resisted (Kim, Dirks & Cooper, 2009). From these studies it may be predicted that trust following an integrity-based violation will be higher when an apology is given, than when a justification is offered.

2.4.2 Substantive response strategies

Substantive responses to trust violations focus on implementing action that physically prevents a person from engaging in behaviours that signal a lack of integrity or competence. According to Janowicz-Panjaitan and Krishnan (2009), substantive responses are akin to legalistic remedies which relate to formal

mechanisms that regulate behaviour, whereas non-substantive responses are akin to non-legalistic remedies that involve some form of social account to affect

perceptions concerning the trustor. Studies have shown that substantive responses increase trust by averting untrustworthy actions by setting parameters around a person’s behaviour (Perrone, Zaheer & McEvily, 2003; Shapiro, 1987), which

30 ensures the reliability of future actions to be prototypical of a competent trustee, or one with integrity (Gillespie & Dietz, 2009; Turner, 1979). This promotes positive trust beliefs about the person (Kramer & Lewicki, 2010; McKnight et al., 1998; Sitkin & Roth, 1993), and a willingness to accept vulnerability and rely on the person in future situations (Nordgren, van Harreveld & van der Pligt, 2010).

Substantive responses can be differentiated into those that primarily aim to modify the system in which employees operate, and those that are directly aimed at modifying the individual’s behaviour. A typical system-focused substantive response is the introduction of a new procedure, which regulates how all employees approach a situation, or a given task. Individual-focused substantive responses are those directed at the trustee to promote a change in their character, and hence behaviour. These may include monitoring the person, imposing some form of formal discipline such as suspension, or implementing some other form of penance (Dirks et al., 2011; Nakayachi & Watabe, 2005; Slovic, 1993; Schweitzer & Ho, 2005). Research looking at the effectiveness of these substantive responses in trust repair is relatively limited. However, there is some indirect evidence that both classes of substantive responses may be effective in repairing employees’ trust.

Gillespie and Dietz (2012) demonstrated the effectiveness of implementing system procedures through a case study of a large engineering company. Following an accusation of systematic bribery, the company’s integrity was questioned and relationships with shareholders, investors, the general public and employees broke- down. In attempt to overcome negative relations, the company identified and implemented a system that detected and prevented unethical conduct, as well as serve as a benchmark for other companies. Gillespie and Dietz noted that the result of implementing this new procedure was an improvement in perceptions regarding

31 the company’s integrity. They proposed that the change in beliefs regarding the company’s trustworthiness was due to preventative measures that help suggest a commitment to best ethical practice. Similarly, in a study looking at individual- focused responses,Nakayachi and Watabe (2005) found that monitoring and self- sanctions of an organization following a dishonest event helped to repair public trust in the organization by increasing beliefs that it was trustworthy. At an interpersonal level, Dirks et al. (2011) found in a lab-based study that monitoring and penance were effective in repairing competence-based violations but less effective in

repairing integrity-based violations. This, they argued, was due to individuals being less likely to accept vulnerability following an integrity-based violation. Dirks et al. suggested that more consideration is needed into how and when substantive

responses can effectively repair trust following an integrity-based violation. It may be the case, for example, that in some cases substantive responses can have a positive impact on trust.

One factor that may influence whether or not a substantive response is effective in repairing trust following an integrity-based violation is the source of the response implementation; specifically whether it was implemented by the trustee (Dirks et al., 2011; Gillespie & Dietz, 2005; Janowicz-Panjaitan & Krishnan, 2009). This research suggests that voluntary responses (i.e., those initiated by the trustee) are more effective than involuntary responses (i.e., those initiated by a third party) as they lead to more personal attributions, and are seen as diagnostic of an individual’s commitment to refraining from future violations. Support for this suggestion comes from Nakayachi and Watabe (2005), who found that the voluntary introduction of sanctions and monitoring by the organization helped to repair trust in the

32 game, participants were more likely to reciprocate co-operative endeavours when the other party had chosen to co-operate voluntarily as opposed to them being forced. Further, Desmet and colleagues (2011) compared the effectiveness of voluntarily and involuntarily penance and found that penance effectively repaired trust when

implemented voluntarily. When the size of penance was accounted for, a large voluntary compensation was more effective than a large involuntary compensation; however, a small voluntary compensation was less effective than a small involuntary compensation.

The implication of these findings is that substantive responses are effective in repairing trust as they offer a safeguard against future untrustworthy actions

(Gillespie & Dietz, 2009). Further, when the trustee initiates the substantive

response, they send strong signals about their commitment to reform and engage in trustworthy actions. Given that the latter has more impact on attributions made about the individual’s character, and that trust is influenced most strongly by a person’s actions, it may be predicted that a substantive response initiated voluntarily (i.e., by the trustee) will lead to higher levels of trust than a substantive response initiated by an external source.

2.4.3 Non-substantive vs. substantive response strategies

The effectiveness of substantive and non-substantive responses when

considered together is under-explored. Empirical studies generally focus on one type or the other, with little consideration of their relative or additive effects. At a

theoretical level, Lewicki (2006) proposes that providing some sort of reparation in addition to a non-substantive response may increase the latter’s effectiveness. A combined response offers more than what may simply be regarded as ‘cheap talk’, validating the claim offered by an apology that the trustee will not commit the act

33 again. Bottom, Gibson, Daniels and Murnighan (2002) partially confirmed this when they found that an apology and an offer of penance re-established co-operative behaviours following a breach, more than either response alone. They attributed this finding to the fact that both responses together had a stronger impact on trust repair by providing something to substantiate the apology as more than just ‘cheap talk.’ Desmet et al. (2011) confirmed this proposal when they found that providing penance in addition to an apology had a positive impact on trust. In their study, participants engaged in a trust game where a confederate failed to exchange money with the participant for self gain purposes. The results showed that trust was higher following the implementation of an apology and a financial compensation by the confederate, as opposed to an apology alone. They argued this was because a financial compensation helped to address the outcome related concerns and an apology helped the address the salient relational concerns, to effectively repair trust.

These studies suggest that non-substantive responses (specifically an apology), and substantive responses have an additive effect on trust. They operate together to increase the overall effect of a response on trust repair by offering a substantive demonstration of a verbal commitment to reform. It may also be argued, rather tentatively, that the loss imposed by a substantive response (e.g., freedom to act unsupervised, loss of finances) may be regarded as sufficient ‘pay-back’ for the initial transgression, thus making the trustee and trustor ‘even’ and able to re-build their relationship. However, what remains unknown from these studies are the relative effects of these responses (e.g., apology compared to a range of substantive responses), which research has yet to address across the trust repair literature.